SkyBridge launches SkyBridge Bitcoin Fund LP

[fillippone]

Finally, SkyBridge opened its new Bitcoin Fund:

SkyBridge Enters Bitcoin Market With New Allocation, Fund Offering

NEW YORK, Jan. 4, 2021 /PRNewswire/ -- SkyBridge Capital, a leading global alternative investment firm, today announced the launch of the SkyBridge Bitcoin Fund LP, which provides mass-affluent investors with an institutional-grade vehicle to gain exposure to Bitcoin. Additionally, on behalf of its flagship funds, SkyBridge initiated a position, valued at approximately $310 million at the time of this release, in funds investing in Bitcoin during November and December 2020.

They provide a short recap of their investment thesis:

<...>
"We believe Bitcoin is in its early innings as an exciting new asset class," said SkyBridge founder and managing partner Anthony Scaramucci. "With the institutional quality custody solutions available today, we believe the time is right to allocate capital and provide our clients access to the digital assets space."
<...>
"Bitcoin is leading a digital monetary revolution around the world," said Brett Messing, SkyBridge President and Chief Operating Officer. "We believe the onus has shifted from 'why are you investing in Bitcoin?' to 'how are you not investing in Bitcoin?'"
<...>
"Our investment team has grown enthusiastic about Bitcoin's properties as a portfolio diversifier and return generator," said Troy Gayeski, SkyBridge Co-Chief Investment Officer and Senior Portfolio Manager. "Investors trust us to see around corners, and we believe it's prudent now to allocate a small portion of your portfolio to digital assets."
<...>
"With global money printing at an all-time high, Bitcoin offers a strong alternative to gold as a store of value and hedge against future inflation," said Ray Nolte, SkyBridge Co-Chief Investment Officer and Senior Partner.

Some details about their fund:



According to this tweet, they already updated the fund terms, changing the NAV calculation to a daily basis:


https://twitter.com/Scaramucci/status/1347993132043005952?s=20


Their full investment thesis can be found on their Website:

BITCOIN INVESTMENT THESIS




Generally speaking, their website is full of resources answering a simple question:
Why Bitcoin?

I do recommend having a look at many of those articles opinions and papers linked there.

Interestingly enough, they are starting to target Grayscale investors:

The SkyBridge Bitcoin Fund LP will charge a 75-basis point management fee and no incentive fee. Accredited investors can subscribe directly to the fund, which requires a minimum investment of $50,000, at skybridgebitcoin.com.

The investment threshold is the same as GBTC, but the management fee is 0.75% compared to 2%.

If this weren't clear enough, they are explicitly proposing as a more efficient alternative to GBTC clients, providing a rationale for the switch:




As a final remarks, the Bitcoins will be held in custody at Fidelity Digital Assets:

Bitcoin is held in custody at Fidelity Digital Assets, a division of Fidelity Investments

[BIT-BENDER]

This is an exciting news, now Bitcoin-ers can benefit from skyBridge, some might think why didn't skybridge have a Bitcoin already, but its an exciting time for them, I don't know their reasons.
The funds skybridge is dishing out for the investment is jaw-smashing, I think this is a good new beginning for skybridge and investors also this is good for Bitcoin and Bitcoin-adaptation.
I would read more about their thesis but with the summary here am already excited about it.

[Darker45]

Here's the domino effect coming into play.

Anthony Scaramucci's story is a typical Bitcoin conversion story of someone who started reluctant but ended up a Bitcoin bull. We'll be hearing more of this kind of story from now on. SkyBridge's Bitcoin-related product is gonna be one among many in the coming years.

Well, ultimately, as the company's thesis pointed out, credit is given to the central banks' 'relentless' fiat currency debasement for Bitcoin's success. 

[vaultman]

This is where the current bitcoin price is generated. Many did not understand why bitcoin rose in price so much in a short period of time, now all major investors are beginning to talk about it to the public. The domino effect has been launched for a long time, then the demand for bitcoin will grow even more, which will give rise to an increase in its price.

[dothebeats]

Seems like this is where most of the grit and the hustle of such companies would come into play: getting that perfect pitch to people who wanted to be in bitcoin but cannot do it themselves. More of these managers and companies would flock the space, and for sure would be trying to get people into their circle in order to grab as much profit and funding as possible. Not that it's something wrong; they actually provide a relatively 'safe' space for investors that doesn't want to go balls-deep on bitcoin and wants to have someone to do the dirty work for them. If they are that sure and dedicated into dealing with bitcoin, it could change the minds of other huge companies such as them to look into bitcoin a little deeper and make their own entries as well.

[1miau]

As a quite influential person, Scaramucci has a very large audience to make Bitcoin more known. Especially his good business relations and appearances on TV are a massive advantage.
And such funds in general are resulting in massive credibility and trust gains for the public.

Scaramucci does definitely know what he's doing here and his endorsement for Bitcoin is very genuine. He has clearly understood what Bitcoin is about and why it's an incredible while still useful store of value. Such descriptions as provided here are extremely useful to explain Bitcoin in a simple but accurate way.

It's definitely very likely a success story. Looking forward to see more stories like from Scaramucci and his SkyBridge Bitcoin Fund. 

[fillippone]

Still on the subject “Why bitcoin”, they added a nice presentation:

Here a couple of interesting slides:







Also, they published some details about their fund (that were actually already in the investment prospects):




Regarding the tombstone here above, there is a reading that might disturb you:

Redemptions:  Quarterly with 30 days’ notice

Actually, reading Grayscale Prospects, you read:

Because each Product does not currently operate a redemption program, there can be no assurance that the value of such Product’s shares will reflect the value of the assets held by such Product, less such Product’s expenses and other liabilities, and the shares of such Product, if traded on any secondary market, may trade at a substantial premium over, or a substantial discount to, the value of the assets held by such Product, less such Product’s expenses and other liabilities, and such Product may be unable to meet its investment objective.

Grayscale doesn't provide a redemption program. If you want to exit from the Trust, you can only sell the shares on the secondary market, not a big issue now those are trading at a premium over the NAV, but potentially an investor's risk.

[Lucius]

I have to admit that the competition definitely wants their share of the cakes, and that they are not afraid to admit it publicly with these comparisons in which they are better than Grayscale. When an investor sees that someone is offering him a significantly lower fee, he will certainly consider changing the fund - but given that Grayscale has been present in the market for years and has gained a certain reputation, can we just expect an outflow of their investors into the new fund?

As for the presentation of Bitcoin, they definitely did not spare words that will positively describe it to potential customers - if you tell someone that BTC is better than gold and that it is there to stay in the long run (referring to the fact that no company disappeared after reaching $100 billion MC) then they are at the top of the biggest BTC believers

As for the redemption program, it is clear that Grayscale does not provide such a possibility - but what specifically happens if a SkyBridge client requests activation of such a program?

[fillippone]

<...>

As for the redemption program, it is clear that Grayscale does not provide such a possibility - but what specifically happens if a SkyBridge client requests activation of such a program?

I till have to be sure about the details, but basically what I think that would happen is the following:

Code:

1. The client asks a redemption
2. The client returns the shares to SkyBridge
3. SkyBridge burns the shares, which control X Bitcoins
4. SkyBridge sells the X Bitcoin for Fiat
5. SkyBridge gives the sales proceeds to the client (bar a commission).

Some modification is possible in case of an "in-kind" contribution/redemption, which I don't even know if it will be possible.

[jaysabi]

<...>

As for the redemption program, it is clear that Grayscale does not provide such a possibility - but what specifically happens if a SkyBridge client requests activation of such a program?

I till have to be sure about the details, but basically what I think that would happen is the following:

Code:

1. The client asks a redemption
2. The client returns the shares to SkyBridge
3. SkyBridge burns the shares, which control X Bitcoins
4. SkyBridge sells the X Bitcoin for Fiat
5. SkyBridge gives the sales proceeds to the client (bar a commission).

Some modification is possible in case of an "in-kind" contribution/redemption, which I don't even know if it will be possible.

The slides SkyBridge put out say they will offer redemptions quarterly with 30 days’ notice, so in those cases the fund would liquidate the underlying assets equal to the redemption request and pay out to the investor. This is how it works with similar funds that invest in equities when a redemption request is made. Since this fund pledges to be 100% invested in bitcoin, this is the only conceivable way it could work. NAV is constantly re-evaluated based on how many shares the fund has issued (net redemptions) versus the overall value of the underlying assets.

As a separate matter, this offering looks more friendly to Grayscale both because of the redemptions and the asset management fees are significantly lower at 0.75%.

[amishmanish]

Seeing this report, who would guess that just a few years back we were still trying to tell people that Bitcoin is going to take the banking world by storm. Now the opening line itself is selling Bitcoin to investors as a hedge against "rampant money printing". Seeing that the minimum investment in these is 50K, the investment companies will be hard-selling it to there HNI investors.

So 50K support for Bitcoin is just a matter of time.

One interesting thing to note is the quote about Sky Bridge opening a position in Gold and then exiting it with profit. Hopefully they'll be open to an "exit" with BTC too. Which means cheaper BTC for us if and when that knife falls momentarily.

[Karartma1]

SkyBridge investment thesis reads more like a bitcoin love declaration! Can you imagine all the companies' boards discussing how to plan to put a % of their cash reserves into btc as we speak? Trust me, that is happening for quite a long time now 

[jaysabi]

SkyBridge investment thesis reads more like a bitcoin love declaration! Can you imagine all the companies' boards discussing how to plan to put a % of their cash reserves into btc as we speak? Trust me, that is happening for quite a long time now 

Lol, to be fair that's not about bitcoin. No investment company ever that's trying to sell someone on an investment product is going to write the pitch as anything other than the most glowing love letter.

[verita1]

Thank you Mr. Fillippone. I love their threads because they illustrate us with a good analysis of the important topics about Bitcoin for the community.

Now you bring us an analysis of the SkyBridge firm which makes us happy how Bitcoin is taking a respected place as the best asset to invest. This news makes me happy for two reasons for Bitcoin and for investors in the USA who will have a new financial institution that will offer their services to protect their capital with Bitcoin. Because it is no secret to anyone that the USA, despite being a powerful nation, is suffering the effects of the pandemic and therefore its economy is at a disadvantage compared to other countries.

Anthony Scaramucci recently tweeted.

Due to demand the SkyBridge Bitcoin Fund is now accepting daily subscriptions. Thank you for your patience and support.

To learn more go to

https://twitter.com/Scaramucci/status/1347993132043005952?s=19

Very good news for SkyBridge! 👏

[fillippone]

<...>

Anthony Scaramucci recently tweeted.

Due to demand the SkyBridge Bitcoin Fund is now accepting daily subscriptions. Thank you for your patience and support.

To learn more go to

https://twitter.com/Scaramucci/status/1347993132043005952?s=19

Very good news for SkyBridge! 👏

Nice find, I already updated the OP.
I tried to take part in the launch conference call, as I was actually puzzled by this details (as others), but as you may have known, 6,000 participants tried to participate, taking down the servers.
I will have another go on the newly announced second round. If I discover something interesting, I will report here.

[fillippone]

Furst updates on the fund

Skybridge COO Reveals Bitcoin Fund Grew to $370 Million


They are slowly growing:

Skybridge Capital’s Bitcoin Fund grew to $360 million dollars in its first few weeks, according to COO Brett Messing.

Skybridge never planned on getting into Bitcoin, according to Messing. But in November and December 2020, Skybridge invested hundreds of millions of dollars into Bitcoin on behalf of its funds, launching its Skybridge Bitcoin Fund on January 4, 2021 with $300 million at the time. And then, with an influx of new money and growth in Bitcoin's price, the fund's value rose even higher.

There a very interesting part:

Skybridge COO Brett Messing concedes, however, that the fund has a one year window before a Bitcoin ETF puts it out of business.
<...>

“The ETF will put us out of business, in that our fund will continue on but we won’t be able to raise any capital,” Messing said, adding, “Why do I need a private fund?”

Indeed my friend, indeed.
I can only imagine what the blokes at Grayscale are plotting to get this day the furthest in the future.

[Lucius]

Hm, do they really think that the BTC ETF (US) is really that close? As far as I could read these days, Biden has appointed some people to key positions who are not very fond of Bitcoin.

Janet Yellen, who is expected to lead the Treasury Department for the incoming Biden Administration, described cryptocurrencies as a "particular concern" when it comes to terrorist financing. “I think many [cryptocurrencies] are used, at least in a transaction sense, mainly for illicit financing and I think we really need to examine ways in which we can curtail their use and make sure that anti-money laundering doesn’t occur through those channels

Also we have new player in SEC :

President-elect Biden is expected to nominate Gary Gensler -- ex-banker and former CFTC chair -- to oversee the SEC later this month. What does that mean for us?
Apparently, it's being speculated that there will be a regulatory crackdown on exchanges. Gensler is known for pushing for investor protections and he has expressed the opinion in the past that exchanges like Coinbase should be regulated by the CFTC or SEC, rather than by the patchwork of state regulators currently overseeing them.

I may be wrong, but I don't see that the ETF will be approved so quickly - and we currently only have one request active. After all, I'm a little weird that someone starts a business and then predicts its own downfall - it seems to me that the ETF will wait at least another 2 years.

[exstasie]

Skybridge COO Brett Messing concedes, however, that the fund has a one year window before a Bitcoin ETF puts it out of business.
<...>

“The ETF will put us out of business, in that our fund will continue on but we won’t be able to raise any capital,” Messing said, adding, “Why do I need a private fund?”

Indeed my friend, indeed.
I can only imagine what the blokes at Grayscale are plotting to get this day the furthest in the future.

Silbert isn't dumb. He knows GBTC will go the way of the dodo in a year or two. He's just riding out their first mover advantage. His whole plan is to stack as many coins as possible (through fees) while funds are restricted to accredited investors. Then it's over.

Then he can go buy himself an island or two and retire.

Hm, do they really think that the BTC ETF (US) is really that close?

I would be amazed if we didn't see one approved by 2022.

[Lorence.xD]

This is where the current bitcoin price is generated. Many did not understand why bitcoin rose in price so much in a short period of time, now all major investors are beginning to talk about it to the public. The domino effect has been launched for a long time, then the demand for bitcoin will grow even more, which will give rise to an increase in its price.

If this is a recent development that has not yet affected the prices at the moment, I think that we will be reaching another ATH in no time. With more and more people getting exposed to bitcoin thanks to Skybridge, there will come a time when people born from bankers money will start investing in too. Hopefully, this will not be the end of institutional investor onslaught in bitcoin market.

[fillippone]

Silbert isn't dumb.

Well. Well with 35 BTC daily you will soon be able to buy a pretty decent Island like Roatan, or maybe Corse!

I wouldn’t be surprised if Grayscae would be actively lobbying the SEC against the ETF approval.